In:
Journal of Financial and Quantitative Analysis, Cambridge University Press (CUP), Vol. 56, No. 2 ( 2021-03), p. 409-442
Abstract:
Using establishment-level data, we examine the impact of the Indian government’s employment guarantee program on labor and firm behavior. We exploit the staggered implementation of the program for identification and find that the program led to a 10% reduction in the permanent workforce in firms. Firms responded to the adverse labor-supply shock by resorting to increased mechanization. This significantly increased the firms’ cost of production, leading to a decline in net profits and productivity. These effects manifested primarily in firms paying low wages, firms having low labor productivity and greater sales volatility, and firms located in states with pro-employer labor regulations.
Type of Medium:
Online Resource
ISSN:
0022-1090
,
1756-6916
DOI:
10.1017/S0022109020000186
Language:
English
Publisher:
Cambridge University Press (CUP)
Publication Date:
2021
detail.hit.zdb_id:
2010249-5
detail.hit.zdb_id:
219406-5
SSG:
3,2
